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The transition to digital television
[‘Balladurette and Juppette: A discrete analysis of scrapping subsidies’]

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  • Jérôme Adda
  • Marco Ottaviani
  • Paul Seabright

Abstract

Summary Digital TVThis paper studies the role of economic policy for the transition from analogue to digital television, with particular attention to the switch off of the analogue terrestrial signal. The analogue signal cannot be credibly switched off until almost all viewers have migrated to digital, due to the policy objective of universal access to television. But before switch off, only part of the population can be reached with the digital signal. In addition, those who are reached need to spend more to upgrade their reception equipment than after switch off, because the capacity to increase the power of the digital signal will be made available only then.After reviewing the competitive structure and the role of government intervention in television markets, we present the early experience of a number of industrialized countries in the transition to digital television. We then formulate a micro-econometric model of digital television adoption by individual viewers. The model is calibrated to UK data and simulated to predict the impact of government policies on the take-up of digital television. Policy makers can affect the speed of take up of digital television by: (1) controlling the quality of the signals and the content of public service broadcasters; (2) intervening in the market for digital equipment with subsidies; and (3) publicizing the conditions and date of switch off of the analogue signal. We find that if the analogue terrestrial signal is switched off only when certain aggregate adoption targets are reached, strategic delays may arise and expectations may affect the success of the switch off policy.— Jérôme Adda and Marco Ottaviani

Suggested Citation

  • Jérôme Adda & Marco Ottaviani & Paul Seabright, 2005. "The transition to digital television [‘Balladurette and Juppette: A discrete analysis of scrapping subsidies’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 20(41), pages 160-209.
    • Handle: RePEc:oup:ecpoli:v:20:y:2005:i:41:p:160-209.
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    File URL: http://hdl.handle.net/10.1111/j.1468-0327.2005.00135.x
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    Cited by:

    1. Chou, Yuntsai, 2014. "The stalemate of cable digital switchover: A study of competition effects and deregulation," Telecommunications Policy, Elsevier, vol. 38(4), pages 393-405.
    2. Fabrice Collard & Omar Licandro, 2020. "The neoclassical model and the welfare costs of selection," Discussion Papers 2020/03, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
    3. Ratidanai Hoonsawat, 2013. "Technological Migration: The Case of Thai Digital Terrestrial Television," Applied Economics Journal, Kasetsart University, Faculty of Economics, Center for Applied Economic Research, vol. 20(2), pages 1-22, December.
    4. Amnon Levy & Benoit Freyens, 2011. "Optimal Control of Broadcasting Spectrum with a Variety-Reception Tradeoff and Consumers’ Income Sensitivity," Economics Working Papers wp11-03, School of Economics, University of Wollongong, NSW, Australia.
    5. Liu, Chorng-Jian & Chuang, Yi-Fei, 2015. "From Sluggish to Brisk: An analysis of Taiwan׳s cable TV digitalization policy," Telecommunications Policy, Elsevier, vol. 39(11), pages 980-995.
    6. Andreas Hadamitzky & Korbinian Von Blanckenburg & Christof Backhaus, 2007. "Die Bereitstellung von öffentlich‐rechtlichen Fernseh‐ und Rundfunkprogrammen: Eine Analyse auf Basis der Kollektivgütertheorie," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(3), pages 256-278, August.
    7. Paul Fenn & David Paton & Leighton Vaughan Williams, 2009. "Productivity growth and funding of public service broadcasting," Public Choice, Springer, vol. 141(3), pages 335-349, December.
    8. Hasbi, Maude, 2015. "Universal service obligations and public payphone use: Is regulation still necessary in the era of mobile telephony?," Telecommunications Policy, Elsevier, vol. 39(5), pages 421-435.
    9. Amnon Levy & Michael R. Caputo & Benoît Pierre Freyens, 2013. "Royalties, Entry and Spectrum Allocation to Broadcasting," Economics Working Papers wp13-02, School of Economics, University of Wollongong, NSW, Australia.

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